The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
With your permission, Mr Speaker, I would like to make a statement. Last November, the Prime Minister announced a radical and ambitious response to the economic impact of covid-19. This was, of course, the UK’s 10-point plan for a green industrial revolution. Its aim is to build back better, to use our recovery to level up the country, to scale up new industries and to support jobs throughout the United Kingdom as we accelerate on our path to net zero by 2050.
Six months on, I am pleased to inform the House that we are already seeing this ambition being delivered on. The 10-point plan is projected to create and support up to 250,000 jobs, and mobilise £12 billion of Government investment and up to three times as much from the private sector by 2030. We are investing in the UK’s most important asset—our workforce—to ensure that our people have the right skills to deliver the low-carbon transition and thrive in the high-value jobs this will create. This is the case for the engineers and construction workers who will build the new offshore wind farms and nuclear plants to provide clean power to our homes, to the retrofitters who will make homes more comfortable and efficient. This work of course builds on the strong progress we have already made as a country in decarbonising our economy. Last year, we hit over two months of coal- free electricity generation, which is the longest streak since the industrial revolution. Two weeks ago, we broke a new wind power record, with both onshore and offshore wind turbines generating 48.5% of the electricity in Great Britain. The plan is projected to reduce UK emissions by 180 million tonnes of carbon dioxide equivalent between 2023 and 2032. I am sure Members are aware that that is equal to taking all of today’s cars off the road for about two years.
Since the 10-point plan’s publication, we have enshrined the UK’s sixth carbon budget in law, proposing in that a target that would reduce greenhouse gas emissions by 78% by 2035 compared with 1990 levels. That is an enormous commitment, but one that we are working extremely hard—flat out, indeed—to achieve. Our Energy White Paper has set out a comprehensive, strategic vision for the transformation of the energy system consistent with delivering net zero emissions by 2050. We have also launched our new, ambitious UK emissions trading scheme, for consultation later this year.
On offshore wind, we have confirmed up to £95 million of Government investment for two new offshore wind ports: Able Marine Energy Park—AMEP—on the south bank of the River Humber, which will receive up to £75 million of government investment; and Teesworks offshore manufacturing centre, on the River Tees, which will receive up to £20 million. Those investments have already been endorsed by business. Since the launch of the 10-point plan, we have seen a 501% increase in British businesses signing up for the UN’s Race to Zero initiative. Rolls-Royce is working on the world’s largest jet engine, which will cut aviation emissions, as part of its £500 million UltraFan engine project. Jaguar Land Rover has announced plans to be all-electric from 2025, with Ford, Bentley, Volvo and Nissan stating that they will do this from 2030. Just today, GE Renewable Energy has announced that it expects to create up to 470 green jobs to support the delivery and operation of all three phases of the Dogger Bank wind farm, the world’s largest offshore wind farm, located off the north-east coast. The impressive growth of the offshore wind sector presents a great example of how delivering net zero will help us level up across the UK. It also demonstrates the confidence that international investors have in our contracts for difference approach and the immense confidence employers have in our people, particularly those in the north-east, where so much of this infrastructure is being deployed.
However, this is not just about energy; each of us has a contribution to make. We are helping businesses and people to go greener every day, by delivering on our commitment to greener business, buildings and transport. In March, we published the UK’s industrial decarbonisation strategy, the first strategy of its kind from any major economy in the world. It sets out clearly how industry can meaningfully decarbonise, remaining competitive and reducing emissions, instead of simply offshoring our industries and pushing emissions abroad.
To that end, the industrial energy transformation fund has already allocated nearly £300 million to 39 projects to help industry transition to a low-carbon future. This month we began the process for deciding the first carbon capture cluster locations in our industrial heartlands, which will be operational by the mid-2020s, with another two set to be created by 2030. All of this increased investment totals £1 billion, helping to support 50,000 jobs, potentially, in areas such as the Humber, the north-east and the north-west, and in Scotland and Wales. We are providing £1 billion of funding to phase 1 of the public sector decarbonisation scheme, which will support up to 30,000 jobs. These jobs will be in building services, engineering and design, low-carbon heating, installation of renewable energy sources and energy efficiency measures.
The 10-point plan is our commitment on meeting the fourth and fifth carbon budgets. Further strategies for sectors of the economy will be set out over the next year. This will include publication of our heat and building strategy, ahead of COP26, to set out our long-term approach to reducing emissions from all buildings in this country. It also includes our hydrogen strategy, which is backed by a £240 million net zero hydrogen fund investment, to support—I stress this point—both green hydrogen produced by electrolysers, and blue hydrogen enabled by carbon capture and storage.
We have also committed a further £20 million to increase the number of on-street charge points for electric vehicles. We will provide £50 million to help people and businesses install these charge points. We will also publish our transport decarbonisation plan as soon as possible, setting out an ambitious pathway to end UK transport’s carbon emissions by 2050 at the latest. I know that my right hon. Friend the Secretary of State for Transport is fully engaged and committed to publishing that.
The impact of those commitments can already be seen. As of March 2021, battery electric vehicle sales stand at 7.7% of the market, and plug-in hybrid electric vehicle sales are 6.1%, which is a huge increase of 88% and 152% respectively from only a year ago. Our acceleration towards low-emission vehicles will not only contribute to cutting our carbon emissions, but strengthen British industry through supporting up to 40,000 jobs by 2020.
All these policies and initiatives are coming together and will be set out in our net zero strategy in the autumn. The strategy will build on the 10-point plan, and it will make the most of new growth and employment opportunities across the UK as we build back better and greener from covid-19.
It will not have escaped hon. Members’ notice that we will be hosting COP26 towards the end of the year, and what we are doing now is setting the scene for that historic event. In that context, our ambition and our leadership are absolutely crucial. The 10-point plan demonstrates our commitment not only to the green recovery, but to the kind of leadership that we want to show in this vitally important year. All these actions bring us a step closer to net zero by 2050, meeting this planet’s greatest threat with ambition and innovation, which is absolutely necessary if we are to hit our goals. I believe passionately and sincerely that a new era of green jobs through Britain’s green industrial revolution has been inaugurated. I commend this statement to the House.
Kwasi Kwarteng
The right hon. Gentleman raised a number of points. The heat and buildings strategy was always due in 2021; I know that because I commissioned it when I was the Energy Minister. I hope it will be published shortly. We also have a hydrogen strategy. He mentioned that our £240 million hydrogen fund was little compared to other countries, but private sector investment has been very successful in the deployment of offshore wind. The reason we have a commanding position—the No. 1 position—in offshore wind deployment is not because of the Government writing cheques; it is because the Government created incentives for the private sector to invest. That will be exactly the way in which we will scale up the hydrogen economy.
The right hon. Gentleman mentioned offshore wind and the UK content of the supply chain. We are absolutely focused on that; we potentially have an auction round 4 at the end of this year, and I am committed to increasing—in fact, we have policies to increase—the level of UK content in offshore wind. The GE Renewable Energy announcement in Teesside only a couple of months ago, in which it committed £142 million, is exactly the kind of investment and commitment to the UK supply chain that we want to see.
Greg Clark (Tunbridge Wells) (Con)
Point 4 of the 10-point plan refers to the need for large-scale battery factories for electric vehicles—sometimes called gigafactories. They need to be up and running within five years, so will the Secretary of State update the House as to where we are in securing them? Will he also comment on the state of discussions about the future of Vauxhall at Ellesmere Port, with its ambitions to build electric vehicles there?
Kwasi Kwarteng
I am pleased that my right hon. Friend mentions gigafactories and the opportunities that they represent. There are conversations as we speak between people who are making batteries and the car makers; clearly, the dynamic between the auto manufacturers and the people who will be making the batteries is an important one. I hope to make a positive announcement about that soon. In relation to Ellesmere Port, there are very positive discussions with Stellantis. I am very much engaged with this matter, and we are particularly hopeful that we can make some movement in the summer on this too.
Stephen Flynn (Aberdeen South) (SNP)
I welcome the statement in so far as it goes, but there is need for further clarity. Hydrogen has been mentioned on a couple of occasions. When exactly does the Secretary of State expect the hydrogen strategy to come forward, and how does he expect the business models to operate in practice?
We have concerns not just about hydrogen and the delays in that regard, but in relation to carbon capture and underground storage. The House will be cognisant of the fact that in 2017 the Government pulled the plug on £1 billion-worth of investment in Peterhead. We know that there are plans to have two clusters in place by the mid-2020s. One of those clusters has to be in the north-east of Scotland, linking the north-east of Scotland with Grangemouth, because of course Scotland has contributed more than £350 billion in oil and gas revenues to the UK Treasury. There can be no just or fair transition if the communities that I represent and others in Grangemouth are left behind.
My final point is in relation to an issue that appears to have escaped the notice of the Secretary of State in his statement, and that is transmission charges. He will be aware that our renewables project in Scotland must pay to access the grid, whereas the renewables project in the south-east of England gets paid to access the very same grid. I see that the Energy Minister is in her place. That is important because she wrote to me on 12 April and said:
“On the specific question of grid charging arrangements, it is important to note that this is a matter for Ofgem as the independent regulator.”
However, as the Minister knows only too well, Ofgem’s strategy and policy is determined by the UK Government. Indeed, the Government’s own energy White Paper states, on page 86:
“We will set out our vision for energy as a guide to Ofgem, by consulting in 2021 on a Strategy and Policy Statement for the regulator.”
When will that consultation begin and when will this Government stop holding back Scotland’s renewables potential?
Kwasi Kwarteng
The hon. Gentleman raised three issues. The hydrogen strategy should be coming out in the summer. It is a twin-track strategy, as I described it as Energy Minister. We are committed to the production of both green, electrolyser-produced hydrogen and blue hydrogen, which comes from carbon capture.
That leads me to the hon. Gentleman’s second point. He will know that there are a number of attractive sites for carbon capture here in the UK. We have set out our road map for two clusters by 2025 and two more by 2030, and we are in the process of deciding how to proceed on that. He can rest assured that Acorn is a very attractive project; it is something that I have looked at, and I am sure we will have some more information on that.
On offshore transmission charges, the hon. Gentleman knows that this has been an issue for a long time. I committed to looking at it as Energy Minister, and we will have a consultation on that. He must also appreciate that the Minister for Business, Energy and Clean Growth, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), is absolutely right: this is ultimately a matter for Ofgem, which, as he knows, is an independent regulator.
Derek Thomas (St Ives) (Con)
I thank the Secretary of State for his statement, and I too particularly look forward to the publication of the transport decarbonisation plan. In west Cornwall, we are working up a plan to bring the towns of St Ives, Penzance and Hayle together in a low-carbon transport plan, bringing together the railway, the roads and multi-use off-road tracks. Will the Secretary of State look at how he can help us to achieve that? Also, if it so happens that he is down in my neck of the woods in a month’s time for the summit, maybe he could meet us to hear about our ambitious plans to provide low-carbon transport for all people living in west Cornwall.
Kwasi Kwarteng
I am pleased to say to my hon. Friend that I would be happy to meet him in Cornwall at any time of his choosing, provided, of course, that it fits in with my diary commitments. I am fully aware of the transport decarbonisation plan being absolutely crucial to his constituents—
Kwasi Kwarteng
The right hon. Gentleman asks when. Unfortunately, wide though BEIS’s purview and authority are, my right hon. Friend the Transport Secretary will have a more accurate perspective on when that strategy will be published.
Darren Jones (Bristol North West) (Lab)
The Secretary of State knows that how we heat our homes and insulate our buildings is an urgent issue that will affect every house across the entire country. He told the Select Committee a few weeks ago that the heat and building strategy would arrive at the end of Q2. Unless I have misunderstood, that is not before COP26; it is around now. Can he update the House as to why it has been delayed once again?
Kwasi Kwarteng
When I was Energy Minister, I wanted it to appear in the first quarter and I think I made public commitments to that. The hon. Gentleman will understand that many of the issues have been discussed across Government, and I am very confident that the heat and building strategy will be published soon. I cannot, however, give him a firm cast-iron date on this.
Felicity Buchan (Kensington) (Con)
I welcome the focus on electric vehicles in the 10-point plan and the £1.3 billion investment in accelerating the roll-out of the grid infrastructure. Does my right hon. Friend agree that we need a comprehensive network of ultra-rapid charging points in order to accelerate the uptake of electric vehicles and to get rid of a lot of the range anxiety?
Kwasi Kwarteng
My hon. Friend is absolutely right. When MPs talk to their constituents, we hear them talk about range anxiety, and it is critical that we have the right charging infrastructure to drive forward the EV roll-out. We have committed public funds to this, but I am very happy to discuss with her, as it is obviously critically important. I feel that we are in a good place, but I would be very interested to hear her ideas.
Sarah Olney (Richmond Park) (LD)
The 10-point plan announced 50,000 new jobs in energy efficiency, which may or may not have been in addition to the 80,000 new jobs that were due to be created by the green homes grant announced last summer in the Government’s plan for jobs. My repeated written questions to the Department to clarify whether those 50,000 jobs are in addition to the 80,000 have not yet elicited a clear answer, so could the Secretary of State tell me how many jobs in energy efficiency have been created so far, and what plans are in place to create more, now that the green homes grant has been scrapped with no plan to replace it?
Kwasi Kwarteng
The 50,000 jobs related to the green homes grant. The hon. Lady will know that there were three elements to the green homes grant. One related to the decarbonisation of public sector buildings. That was £1 billion deployed through Salix. That has gone extremely well. Of the remaining £2 billion, £500 million was to be disbursed by local authorities for council housing, social housing and people who are vulnerable. That programme is going very well. What has been rejigged has been the half that related to owner-occupied buildings. It was a short-term stimulus plan that was due to run out in March this year, and we are looking at a replacement scheme.
Jack Brereton (Stoke-on-Trent South) (Con)
I welcome the ambitious plans that my right hon. Friend has set out to clean up our energy system and support green British jobs as we work to end the UK’s contribution to climate change by 2050. However, can he confirm that he will prioritise keeping bills affordable, particularly for lower-income households in Stoke-on-Trent, as we transition towards net zero?
Kwasi Kwarteng
My hon. Friend will know that this is a critical point. There is always a balance between trying to decarbonise and making sure that energy bills are low to protect people. That is why we have a warm homes discount, which has worked very effectively. We have deployed money, and committed to that in the manifesto, with a home upgrade grant of about £2.5 billion. We are always looking at schemes not only to decarbonise, but to keep the costs low for those who are most vulnerable.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
One could be forgiven for thinking that COP26 is approaching and the Government need to make some headline announcements. What is missing in the Secretary of State’s statement today is a clear set of metrics against which this House, this country and the world can measure the Government. Will he take on board the thoughtful recommendations of the Public Accounts Committee, which said that he should report properly to this House with clear targets and metrics which we can hold him to? I know that he is a man of intelligence, and a man who is committed to this; if he is that committed, will he open up that scrutiny so that we can really hold the Government properly to account?
Kwasi Kwarteng
Let me declare an interest: I served under the hon. Lady’s chairmanship on the Public Accounts Committee and I am very grateful for the time that I spent on the Committee. Of course, I will treat the Committee with the respect and courtesy that are due it. I look forward, as do my officials, to being asked about any of the Government’s programmes in respect of the net zero agenda.
Sir David Amess (Southend West) (Con)
I welcome the commitment in the 10-point plan to achieve net zero carbon emissions by 2050, but we have very few electric vehicle charging points in Southend and many parking restrictions. We would very much like to see them on new builds and in people’s driveways. With petrol and diesel cars being banned by 2030, will my right hon. Friend please help us to get more of these charging points in Southend before we become a city?
Kwasi Kwarteng
That begs the question, when will Southend become a city? Leaving that to one side, of course I will help my hon. Friend achieve those goals. The electric charging point roll-out is perhaps the most important metric—the most important thing to do— in order to achieve our goals with respect to electric vehicles.
Justin Madders (Ellesmere Port and Neston) (Lab)
Following on from the question of the right hon. Member for Tunbridge Wells (Greg Clark), there were some positive comments from the chief executive of Stellantis yesterday to the effect that things were moving in the right direction but we were not quite there yet. May I take this opportunity to remind the Secretary of State that Cheshire West and Chester Council and the local enterprise partnership have been working very closely with the civil servants over the past few months to make sure that the right deal is in place. They stand ready to do anything else they can to get this thing over the line, which is what we all want to see.
Kwasi Kwarteng
I am conscious of the work that the hon. Gentleman has done, as he put it, to get this over the line. I was gratified to see Mr Tavares’ comments yesterday and I think that we are in a reasonable place. We obviously need to work very hard together to get it over the line, but the situation in Ellesmere Port is moving in a positive direction.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I thank and welcome everything that the Secretary of State has said today. May I join the hon. Member for Aberdeen South (Stephen Flynn) in extolling the virtues and benefits of the Acorn project in the north-east of Scotland—of course headquartered in Banchory in my constituency—as being essential to our drive towards net zero? Does my right hon. Friend not agree that, if his Department were to choose this project, it, along with the energy transition deal, would demonstrate again to the people in the north-east of Scotland the value of remaining a part of our United Kingdom?
Kwasi Kwarteng
I am delighted to see this degree of cross-party fraternity on that. All I would say is that the Acorn project has a lot to recommend it.
Stephen Farry (North Down) (Alliance) [V]
The Government talk of a green industrial revolution, but surely they should be working through the concept of a green new deal bringing together attacking climate change and addressing social justice and job creation. On job creation specifically, how do the Government come to the figure of a quarter of a million new jobs by 2030, as many non-governmental organisations and think-tanks believe that the Government could be creating closer to 1 million jobs over the decade with the right policies of investment, with areas such as Northern Ireland achieving 50,000 more new jobs?
Kwasi Kwarteng
Of course, the number of jobs depends on the definitions that you use. The 250,000 number specifically relates to the measures in the 10-point plan. I am sure the hon. Gentleman will know, as he has been in the House for a while now, that as Energy Minister I always used to say that we have about 400,000 so-called green-collar jobs today and our target was for 2 million by 2030. That is a much wider range of jobs than those specifically created by the 10-point plan, and that is where there is a discrepancy in the numbers.
Jason McCartney (Colne Valley) (Con)
There is a lot of older housing stock in my constituency and I therefore fully support the Government’s aims to make our homes warmer and greener. I appreciate that there are issues with the green homes grant scheme, but will the Secretary of State commit to boosting investment in energy efficiency measures in our homes, because that will not only be good for the planet and good for residents in helping to reduce bills, but create tens of thousands of quality green jobs?
Kwasi Kwarteng
I fully appreciate my hon. Friend’s points. He and I stood on a manifesto in 2019 that expressly committed us to spending £9.2 billion over 10 years on exactly the kinds of measures that he mentioned. That is something that I am very focused on.
Charlotte Nichols (Warrington North) (Lab) [V]
Thousands of my constituents work in the nuclear sector, which only this week has seen students from Warrington University Technical College beginning prestigious degree apprenticeships at Sellafield in Warrington—proof that the sector is a vital partner in the skills and levelling-up agendas, meeting our decarbonisation goals and creating high-quality green jobs. The Government have rightly concluded that we need much more nuclear power in the mix to reach net zero. However, under their watch, three large-scale nuclear projects have been abandoned due to the lack of a financing mechanism, which the Government claim to have been working on for four years. Why is nuclear financing more complicated than nuclear science?
Kwasi Kwarteng
I do not think it is. The hon. Lady will remember that the third of the Prime Minister’s 10 points was expressly committed to nuclear power. I was very pleased, as Energy Minister, to visit the nuclear college at Hinkley Point. I am sorry that I did not manage to go to Sellafield. We are completely committed to this, and we will bring forward in this Parliament legislation that will further commit us to creating more nuclear power in this country.
Simon Fell (Barrow and Furness) (Con)
The 10-point plan recognises the immense value of local jobs in offshore wind production—something that my constituents are anticipating as Barrow and Furness is the home of the second-largest wind farm in the world. However, wind is not the only crucial renewable energy source in Cumbria: nuclear is hugely important and, as the hon. Member for Warrington North (Charlotte Nichols) said, we are reliant on it. With that in mind, will my right hon. Friend update the House on the financing policy that sits behind this to enable these jobs to be created?
Kwasi Kwarteng
My hon. Friend will realise that sensitive discussions are being held all the time, but I refer him back to my answer to the previous question. The third point of the Prime Minister’s 10-point plan was all about nuclear power. It said explicitly that we are committed to having a decision on a plant before the end of the Parliament. We are in conversations with operators and developers—very fruitful conversations, I might add—to bring that about, and we have an ongoing commitment to increasing, not decreasing, capacity in nuclear power.
Tahir Ali (Birmingham, Hall Green) (Lab) [V]
Does the Secretary of State agree that wide-scale housing insulation is key to bringing down household emissions? If so, can he explain what possible rationale he had for axing the green homes grant scheme? Will he take this opportunity to publicly apologise to the businesses affected by the shambolic delivery of the green homes grant schemes, including those businesses that his Department failed to pay for the work that was carried out under the scheme in good faith, some of whom were reportedly forced to make staff redundant?
Kwasi Kwarteng
The accusation that BEIS somehow did not pay people who worked on the scheme is a very serious one and I need to investigate it. I do not think that was the case but, as I said, I will investigate.
As I have mentioned, the green homes grant was composed of three elements. One was the decarbonisation of public sector buildings through Salix, the public finance body, and another relied on local authorities to distribute funds to enhance social housing and decarbonise those buildings. Both those elements were successful. The other element related to owner-occupiers. It was a short-term scheme that was always designed to end at the end of March, which it did, and we are looking to develop a replacement.
Cherilyn Mackrory (Truro and Falmouth) (Con) [V]
Falmouth boasts the deepest natural harbour in western Europe and it is well placed to play a leading role in the UK’s ambition to deploy a gigawatt of FLOW—floating offshore wind—capacity by 2030. FLOW deployment in the Celtic sea alone could create more than 3,000 jobs. Local universities and the private sector have come together to accelerate deployment with a Strength in Places fund application. Will the Secretary of State visit the port of Falmouth with me—perhaps while he is in Cornwall next month—to see the exciting plans for ensuring that Cornwall is at the heart of this emerging sector?
Kwasi Kwarteng
I am not sure which is coming first—St Ives or Falmouth—but I am sure that arrangements can be made for such a visit.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his statement. Will he please outline how the intended £12 billion of Government investment—with potentially three times as much from the private sector—to create and support 250,000 green jobs will be distributed throughout the United Kingdom? In particular, what will happen in Northern Ireland, which currently seems to be increasingly outside of the UK plan but has the potential to play a tremendous role—for example, at Harland & Wolff in Belfast and, indeed, other booming sites of industry throughout Northern Ireland—in achieving our industrial revolution?
Kwasi Kwarteng
I am delighted that the hon. Gentleman has brought that question up. He will know that I speak regularly to my right hon. Friend the Secretary of State for Northern Ireland and the Minister of State, Northern Ireland Office, my hon. Friend the Member for Worcester (Mr Walker), about investment in Northern Ireland, particularly in relation to net zero. The hon. Gentleman will know about the offshore wind opportunities in Northern Ireland, I am particularly excited about the opportunities for hydrogen, and he will also know about the operation of Wrightbus and its efforts to bring hydrogen into the transportation system. There are exciting opportunities for Northern Ireland in relation to the net zero 10-point plan and I would be happy to discuss them with the hon. Gentleman.
Mr Mark Harper (Forest of Dean) (Con)
I listened carefully to what the Secretary of State said about the paper he is going to produce this year on heating buildings and about point 2 of the plan, on the hydrogen strategy. Will he make sure that the plan properly recognises that significant numbers of homes, including in my constituency of Forest of Dean, are not on the gas grid, and that we need solutions that work for the people who live in them so that they can have what they want, which is greener heating for their homes that is affordable and deliverable on the necessary timescale?
Kwasi Kwarteng
My right hon. Friend will know that in the United Kingdom we have an extremely diverse range of buildings and dwellings, which means that a one-size-fits-all policy just does not work for energy in the UK. There are lots of ways in which we can decarbonise buildings, which is exactly what will be spelled out in the heat and building strategy and—to a lesser degree, but more focused on hydrogen—in the hydrogen strategy. I would be happy to discuss with my right hon. Friend what we are doing to ensure that his constituents who are off the grid can get cheap, affordable green energy.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Secretary of State for his statement and for responding to the 20 questions. I wish him well for his extensive tour of Cornwall.